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Australian gov renews IBM contract for quantum computing, AI

The new five-year deal is worth $725 million and succeeds the digital transformation agency's previous contract which exceeded $2 billion in spending

Australia’s Digital Transformation Agency (DTA) has secured a whole-of-government arrangement with IBM to allow agencies to access the company’s products, including the application of emerging technologies such as artificial intelligence (AI) and quantum computing.

Details of how the government will be using AI and quantum computing were not supplied, but the deal would see all government agencies being able to tap into IBM's offerings.

The agreement is valued at $725 million (£413 million) and will last for the next five years, replacing an agreement signed in 2018 between the two entities.

Focus areas of the deal include flexibility for agencies to move assets and encourage reuse opportunities across government, as well as reducing the time, effort, and resources needed to streamline contracting, said the DTA.

IBM will also provide training and certification to improve digital skills across the government, as well as work with the DTA to establish data protection and encryption measures to protect the government better against future cyber security threats.

All agencies will continue to be able to access IBM’s technology. This includes IBM’s suite of technology capabilities like IBM Watson, which uses AI to automate processes, and the IBM Cloud, to store government data.

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The new agreement follows the first of its kind in 2018, which was valued at $1 billion (£567 million). However, overall spending exceeded $2 billion (£1.1 billion) and was claimed to be the highest-value contract negotiated by the Australian government, according to IT News.

“This arrangement is the right fit for the current context and requirements for its participating agencies. It offers important continuity for the business systems that support critical government services which Australians rely on,” said Chris Fechner, CEO at the DTA.

“Through the Commonwealth negotiating as one entity, the contract will continue to give government agencies better value for money and more flexibility when sourcing commonly used IBM products and services with a focus on essential government requirements.”

The new deal was jointly negotiated and signed by the DTA, Australian Taxation Office, Department of Defence, Department of Home Affairs, and Services Australia. 

IBM already expanded its agreement with the state of New South Wales (NSW) in June 2021, in which it extended its arrangement for another three years.

The company claimed the revised whole-of-government agreement would deliver cost savings and provide a more streamlined process for agencies to access IBM’s offerings, including IBM hybrid cloud, security, and AI.

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